Basics of a VA Streamline Interest Rate Reduction Refinance Loan

The VA Streamline IRRRL was established to help VA mortgage borrowers reduce their interest rate. Not everyone would qualify for this program, but current homeowners under the VA mortgage loan program may be eligible if they are looking to switch over to a more stable and secure loan term, such as going from an Adjustable Rate Mortgage (ARM) to a Fixed-Rate Mortgage.

Even though the VA streamline refinance is offered only by VA-approved lenders, the Department of Veterans Affairs (VA) is the agency that guarantees the loan in the event that the borrower defaults. The streamline under VA was designed not only to help VA homeowners save after a refinance, but during as well.

Being one of the most cost-efficient programs around, here are the advantages of refinancing through the VA streamline refinance program, besides the reduced paperwork involved:

There are usually no out-of-pocket expenses

Offers the most competitive rates

You can refi with another lender

You are not required to obtain a new Certificate of Eligibility (COE)

A reduced interest rate and mortgage payment are often the post results

Primary residence are usually eligible, as long as you certify that you were in fact the previous property owner

Keep in mind that there is no cash-out allowed with a VA streamline refinance.

Just like with any other mortgage loan program, you can expect for the VA streamline refinance program to have its own set of criteria and guidelines for qualification. However, many banks may have their own additional set of guideline requirements that borrowers must meet before an eligibility status can be determined. These guidelines may vary from lender to lender.

VA Streamline Refinance Important Facts

The VA streamline refinance is fairly simple compared with qualifying for a VA purchase home loan.

The VA does not require an appraisal, credit information, or underwriting, but your VA-approved lender may require these things.

It is possible to roll your closing costs into your VA streamline refinance – meaning you will be required to bring zero money to closing.

With the VA streamline, your new monthly payment must be lower than the previous loan’s monthly payment, unless you are refinancing an adjustable rate mortgage or the new loan term is less than the old one.

Your new interest rate must be lower than the interest rate you had with your previous loan.

The VA streamline usually allows for a fixed rate or variable rate mortgage.

With the VA streamline, you may be able to finance energy efficient improvements into your loan

No cash-out is allowed with the VA streamline refinance.

You must be current on your existing VA mortgage and not have more than one 30-day late mortgage payment within the past 12 months.

VA Streamline IRRRL Closing Costs

Another great benefit to mention is the closing costs for a VA streamline refinance. There are typically no out-of-pocket expenses required from the borrower. The closing cost is oftentimes wrapped into the new loan and can be paid through the new monthly mortgage payment.

VA Streamline Refinance: VA-Approved Lenders

The VA streamline refinance program is not handled by the VA; it is done through VA-approved lenders. Make sure you only do businesses with these legit lenders.

When inquiring about a mortgage on this site, this is not a mortgage application. Upon the completion of your inquiry, we will work hard to match you with a lender who may assist you with a mortgage application and provide mortgage product eligibility requirements for your individual situation.

Any mortgage product that a lender may offer you will carry fees or costs including closing costs, origination points, and/or refinancing fees. In many instances, fees or costs can amount to several thousand dollars and can be due upon the origination of the mortgage credit product.

When applying for a mortgage credit product, lenders will commonly require you to provide a valid social security number and submit to a credit check . Consumers who do not have the minimum acceptable credit required by the lender are unlikely to be approved for mortgage refinancing.

Minimum credit ratings may vary according to lender and mortgage product. In the event that you do not qualify for a credit rating based on the required minimum credit
rating, a lender may or may not introduce you to a credit counseling service or credit improvement company who may or may not be able to assist you with improving your credit for a fee.